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5.49 Neutral Environment
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For the moment, the state regulators of the Republic of Armenia have refrained from decision-making on the regulation of blockchain and cryptocurrencies. This notwithstanding, a significant number of private businesses are developing in Armenia, as well as projects established in collaboration with the state authorities based on blockchain technology.
Armenia should be commended for its efforts to establish a favorable infrastructure for the promotion of projects and initiatives associated with new technologies, specifically in the tax sector. In 2011, Armenia passed the law "On Free Economic Zones" was adopted, which offers tax benefits to residents of free economic zones (FEZs).

In 2015, the country adopted the law "On State Assistance to the IT Industry", which legally introduced the right to tax holidays for newly established IT companies for a period until January 1, 2020. During the 18 months following the adoption of the law, 178 companies were registered in Armenia and 865 new jobs were created, whereas before the adoption of the law, an average of 15 companies appeared in the country annually. In 2017 and 2019, amendments were introduced to the law to extend the tax breaks to the end of 2022 and expand the range of companies eligible to enjoy such benefits.
Rather Enabling Political Environment
7.0 points
Armenian stakeholders' positions on blockchain and cryptocurrencies combine high hopes that the new technologies will empower the country to make a breakthrough with fears of threats related primarily to the lack of knowledge and positive experience at the global level. Regulators have refrained from actions to regulate cryptocurrencies and blockchain, expecting more certainty in this area.

Cryptocurrency issues are the ones causing most tension, while the blockchain technology, on the contrary, is more often seen as useful and promising.

Not Enabling Legal Environment
1.88 points
Regulatory Convergence
There is no single integrated approach to blockchain and cryptocurrencies in the country, and there is no specific body to regulate legal relationships using blockchain and cryptocurrencies. The Central Bank of the country regulates and supervises the financial system and currently refuses to recognize and regulate cryptocurrencies. There are no palpable contradictions in the approaches of different regulators to the crypto-industry.

Definiteness of Legal Regulation
There is no regulation of cryptocurrencies and distributed ledger technology in Armenia, but activities related to cryptocurrencies and blockchain are not prohibited. The status of cryptocurrencies is uncertain, whereas virtual currencies, including Bitcoin, are not considered to be electronic money, and the Central Bank warns citizens against its use.

Stability of Legal Regulation
Currently, there are no legislative attempts to regulate cryptocurrencies and blockchain. At the same time, professional participants and regulatory authorities analyze international experience, first of all, in the neighboring and partner countries, assess their approaches to the operation of the Armenian market, and hold consultations with the business community. In addition, blockchain enthusiasts are engaged in outreach activities, seeking a balance between the freedom of action of market participants and the protection of citizens and investors.

Adequacy of Legal Regulation
Blockchain and cryptocurrencies in Armenia are not regulated by any applicable law, there are no special state bodies that can advise on the creation, implementation and operation of blockchain projects, and there is no judicial practice concerning blockchain project regulation. The state strives to encourage innovative technologies by providing tax incentives, but does not take into account the peculiarities of crypto-startups.
Situation with the Rule of Law
Armenia is not covered by the World Justice Project, therefore, RLI is not identified. The calculation of the Rule of Law Index is based on the average for the group of countries with similar environment for the promotion of democracy, human rights and freedoms, and rule of law in the Freedom in the World index (Freedom House). The Country Aggregate Score for Armenia is 51 in the Freedom in the World index, therefore, countries with similar scores (Country Aggregate Score: 48-53) – these include Bosnia & Herzegovina, Nigeria, Niger, Guatemala, Malaysia, Cote d'Ivoire, Kenya. Average Rule of Law Index (World Justice Project) for this group is 0,47.

The conditions of the legal regulation of blockchain and cryptocurrencies are not favorable, and since the values of the sub-criterion of the rule of law are low (0.47), the amount of the difference between weighted (multiplied by Rule of Law Index score) and unweighted assessments are significant.
Rather Enabling Infrastructure Environment
7.60 points
Armenia ranks forty-first in the World Bank's Doing Business rankings out of one hundred and ninety countries and eighty-seventh out of one hundred and ninety-three countries in the E-Government Development Index.